Increasing small farm income and resource use through agricultural credit in Bangladesh : a case study

Description

Rural development with distributive justice is the major
goal of the economic development strategy of Bangladesh- To achieve
this goal efforts are being made to raise agricultural output and to
create more employment opportunities for the rural unemployed. The
adequate flow of agricultural credit to quicken the diffusion of
capital and labour intensive HYV crops with increasing use of modern
inputs is the major component in the rural development programme of
the Government of...[Show more] Bangladesh.
This study is an attempt to assess the credit requirement
of the small farmers and to analyse the impact of credit on cropping
intensity, farm income and labour use in the "Barind" area of
Rajshahi district of Bangladesh. A linear programming approach has
been adopted.
The study has revealed that working capital is the most
binding constraint and adequate availability of institutional credit
substantially raises cropping intensity and farm income. But the
credit for crop farming alone has a limited role in creating additional
job opportunities.
Further, the study has shown that the relatively smaller
farmers utilise credit more efficiently and as such their optimal
credit need per acre is also much higher than that of the existing
per acre credit ceiling of the institutional agencies. Therefore to exploit fully the potentialities of the
rural areas and to ameliorate the impoverished conditions of the
small farmers an increased flow of rural credit for farming
activities is essential.